Trade Idea: The Impending Shift from Bullish to Bearish Structure
EUR/USD has formed a classic Head and Shoulders pattern, a widely recognized reversal formation that signals the potential exhaustion of bullish momentum. The price is currently trading within a rising channel, but with the right shoulder already developed, a break below the channel support could trigger a waterfall sell-off, accelerating downside momentum.
Key Confirmation for Entry:
A break below the rising channel support and the neckline of the Head and Shoulders pattern will act as a strong trigger for bearish continuation.
Retesting this broken level as new resistance would offer an optimal shorting opportunity.
Entry Strategy:
Aggressive Entry: Enter short upon the initial break of channel support.
Conservative Entry: Wait for a retest of the broken structure before entering short.
Profit Targets:
First Target (TP1): 1.0400 – Psychological level and previous structural support.
Second Target (TP2): 1.0325 – Strong demand zone aligned with historical support.
Stop Loss:
Above the right shoulder at approximately 1.0560, to protect against potential false breakouts.
Risk Management:
Reduce exposure if price struggles to maintain bearish momentum.
Move stop loss to breakeven after securing TP1.
The potential waterfall effect is a result of trapped long positions facing forced liquidations once key support zones are breached. The combination of technical factors suggests that once the neckline gives way, selling pressure could intensify, leading to a sharp downside move. Stay alert for confirmation and execute accordingly! 🚨📉
EUR/USD has formed a classic Head and Shoulders pattern, a widely recognized reversal formation that signals the potential exhaustion of bullish momentum. The price is currently trading within a rising channel, but with the right shoulder already developed, a break below the channel support could trigger a waterfall sell-off, accelerating downside momentum.
Key Confirmation for Entry:
A break below the rising channel support and the neckline of the Head and Shoulders pattern will act as a strong trigger for bearish continuation.
Retesting this broken level as new resistance would offer an optimal shorting opportunity.
Entry Strategy:
Aggressive Entry: Enter short upon the initial break of channel support.
Conservative Entry: Wait for a retest of the broken structure before entering short.
Profit Targets:
First Target (TP1): 1.0400 – Psychological level and previous structural support.
Second Target (TP2): 1.0325 – Strong demand zone aligned with historical support.
Stop Loss:
Above the right shoulder at approximately 1.0560, to protect against potential false breakouts.
Risk Management:
Reduce exposure if price struggles to maintain bearish momentum.
Move stop loss to breakeven after securing TP1.
The potential waterfall effect is a result of trapped long positions facing forced liquidations once key support zones are breached. The combination of technical factors suggests that once the neckline gives way, selling pressure could intensify, leading to a sharp downside move. Stay alert for confirmation and execute accordingly! 🚨📉
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.